Assignments: Corp Fin Reprtn xQuestion 8 - E&P Set #5 (Revie xM Inbox (1,094) ep6778a@stud x M (no subject) - ellse.patipevo.mheducation.com/ext/map/index.html?_con3Dcon&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F...Review) iНеOn August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31,2041. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $60,one share of Limbaugh Communications' no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1,2021, the market value of the common stock was $58 per share and the market value of each warrant was $8.In February 2032, when Limbaugh's common stock had a market price of $72 per share and the unamortized discount balance was $1million, Interstate Containers exercised the warrants it held.Required:1. Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment byInterstate.2. Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment byInterstate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in millions and round to 2 decimal places (I.e., 5,500,000 should be entered as 5.50)).Vlew transaction listJournal entry worksheet1.2.< Prev8 of 12Next >IMG-0582.jpgIMG-0583.jpgacct780hey.zipQuestion 2 2.docxMacBook Air114F5941000

Answer 1 Journal Enteries Journal entry is type of accounting entry that is used to record…

Answered: Limbaugh Communications issued $30…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information is taken from Multi-Task Corporation’s November 30, 2021 balance sheet: Liabilities: 6% Bonds payable, $4,500,000, maturing October 31, 2024, each $1,000 bond convertible into 25 common shares at any time up to October 31, 2024 $4,500,000 Shareholders’ Equity: 7% Cumulative preferred shares, convertible at the rate of 5 common shares for 1 preferred share, 44,380 shares outstanding 957,000 Common shares, 2,675,000 shares issued and outstanding 8,025,000 Multi-Task Corporation had net income for the 2021 year of $8,344,500. Multi-Task pays income tax at a rate of 28%. Both the bonds and the preferred shares were outstanding for the entire year. The weighted-average number of common shares outstanding for the 2021 year was 2,745,500. Required: Calculate basic earnings per share for Multi-Task Corporation for the year ending November 30, 2021. Calculate diluted earnings per share for…
On September 30, 2023, Cullumber Inc. issued $3,120,000 of 10-year, 8% convertible bonds for $3,494,400. The bonds pay interest on March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,182,400. On March 23, 2026, half of the warrants were exercised. The common shares of Cullumber were trading at $20 each on this day. Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. (a) Prepare the journal entry to record the issuance of the bonds on September 30, 2023. (Credit account titles are automatically…
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On August 1, 2024, Perez Communications issued $25 million of 10% nonconvertible bonds at 104. . The bonds are due on July 31, 2044. . Each $1,000 bond was issued with 30 detachable stock warrants, each of which entitled the bondholder to purchase, for $60, one share of Perez Communications' no par common stock. • Interstate Containers purchased 20% of the bond issue. . . On August 1, 2024, the market value of the common stock was $58 per share and the market value of each warrant was $8. In February 2035, when Perez common stock had a market price of $73 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held. Required: 1. Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. 2. Prepare the journal entries for both Perez and Interstate in February 2035, to record the exercise of the warrants.
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On August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31, 2041. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $60, one share of Limbaugh Communications’ no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2021, the market value of the common stock was $58 per share and the market value of each warrant was $8. In February 2032, when Limbaugh’s common stock had a market price of $72 per share and the unamortized discount balance was $1 million, Interstate Containers exercised the warrants it held.Required:1. Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment by Interstate.2. Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.
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On May 1, 2014, Payne Co. issued $900,000 of 7% bonds at 102, which are due on April 30, 2024. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne’s common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2014, the fair value of Payne’s common stock was $35 per share and of the warrants was $2. On May 1, 2014, Payne should credit Paid-in Capital from Stock Warrants for $36,560. $36,720. $37,080. $65,000.
On January 1, 2024, Gless Textiles issued $12 million of 9%, 10-year convertible bonds at 101. • The bonds pay interest on June 30 and December 31. • Each $1,000 bond is convertible into 40 shares of Gless's no par common stock. • Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). Century Services purchased 10% of the issue as an investment. Required: 1. Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century. 2. Prepare the journal entries for the June 30, 2028, interest payment by both Gless and Century assuming both use the straight- line method. 3. On July 1, 2029, when Gless's common stock had a market price of $33 per share, Century converted the bonds it held. Prepare the journal entries by both Gless and Century for the conversion of the bonds (book value method). Complete this question by entering your answers in the tabs below.…
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